1. (U) Summary: On October 1, government authorities closedthe "crown" of the Warsaw Stadium, where most trade inpirated goods had taken place. The periphery of the Stadiumis still open to traders. Counterfeit goods can still befound, although the quantity seems to be less, and the goodsare less brazenly displayed. The Polish government is stillstruggling to find a new location for the market.Ironically, its efforts may be frustrated by therecently-enacted anti-business "Big Box Store" law. Closingthe Stadium's crown represents incremental but real progresstoward greater respect for intellectual property rights inPoland. End summary.

2. (U) On October 1, traders in the "Russian Market" at theWarsaw Stadium were expelled from the top or "crown" of theStadium. The crown was the center of trade in pirated andcounterfeit goods, partly because the distance from theStadium entry to the crown allowed sufficient time forlookouts to warn traders of police raids. On October 5,EconOff observed that access to the crown is now blocked bybarricades, which are guarded by police.

--------------------------------------------- -------Trade in Pirated Goods Continues, But Less Obviously--------------------------------------------- -------

3. (U) Traders continue to occupy stalls on the peripheryof the Stadium. On October 5, most of the permanent stallsseemed to be occupied by Poles or Vietnamese selling cheapbut genuine goods. Trade in counterfeit goods continues, butis far less apparent than in the past (reftel). For example,several times Russians approached EconOff offering films andmusic, as well as cell phones (presumably stolen) andwatches. However, there were no DVDs openly displayed. Onetrader offered EconOff cigarettes. When asked what type hehad, the trader opened his car trunk and -- while casuallyshoving cartons inside his coat -- revealed four largeplastic sacks full of cartons of different brands.

4. (U) Some of the African traders, who previouslycontrolled much of the crown's trade in counterfeit athleticshoes and sportswear, have relocated to a spot behind theStadium parking lot. Only legitimate goods were on display,the sole exception noted being a single "NIKE" shirt.However, when EconOff asked one trader standing in front of apile of nondescript no-name coats whether anything wasavailable "with a name on it," he was immediately surroundedby a dozen traders. One pulled a "Puma" shoe out of his coatpocket, while another unzipped his jacket to reveal he waswearing at least three "Puma" sweatshirts, sales tagsattached. Others frantically began pulling counterfeitsportswear from hiding placing in duffel bags. The traders'opening offer for Puma shoes was PLN 65 (about USD 24), whilesweatshirts went for PLN 40 (about USD 15). Prices were, ofcourse, negotiable.

5. (SBU) Counterfeit goods could be found, with somelooking, but that fact needs to be kept in perspective. Thenew locations are not well-known. EconOff was only able tofind the knock-off shoe and sweatshirt traders by following atrader packing a bulging duffel bag, and that trader was onlyspotted after over an hour spent looking. The number oftraders appeared greatly diminished, and the volume of goodsavailable seemed to be a fraction of what it had been. Incontrast, the presence of police was much more noticeable.Closing the crown dealt a real and substantial blow to tradein pirated goods.

6. (SBU) The Polish government is still trying to settle ona new location for the market. All of post's IPR contacts --the police, concerned ministries, and industryrepresentatives -- have stressed the importance of the newmarket having specific points of entry and exit so that thepolice can prevent counterfeit goods being brought into themarket space. One of the most frequently-mentioned possible

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locations, in the eastern suburbs of Warsaw, is currently anempty field. Time would be required to construct marketstalls there (although the Ministry of Sport has stated thatthe traders should be able to remain on the periphery of theStadium until design work on a new stadium is completed inmid-2008). The other most frequently-mentioned possiblelocation, in the northern suburbs of Warsaw, currentlycontains shabby old warehouses. However, over 20,000residents there have signed a petition opposing having themarket in their backyards. The local mayor, as well asmembers of the local council (rada gmina), have stated theywill not give their approval for siting the market there.Such approval would be needed under Poland's new "Big BoxStore" law.

7. (SBU) The brainchild of a Self-Defense (Samoobrona)representative who owns a chain of small convenience stores,the Big Box Store Law (formally, the Law on Creation of LargeRetail Units) was enacted on May 21. It requires a positiveopinion from the local council (rada gmina) and a specialpermit from the local mayor to create retail units with asales area greater than 400 square meters. For retail unitsin excess of 2,000 square meters of retail space, a positiveopinion from the regional council (sejmik wojewodztwa) isalso required. Requiring these permits increasesopportunities for corruption. Post worked extensively withbusiness groups to limit the law's negative impact byexempting existing investments from the law. Nevertheless,the law poses a cumbersome and potentially insurmountablebarrier to market access for supermarkets, shopping malldevelopers and "big box" retailers. Poland's Ombudsman haschallenged the law in the Polish Constitutional Court, butthe Court has not yet ruled on the matter.

8. (U) The Russian market is not closed completely, and,with a little looking, counterfeit goods can still be found.However, the worst part of the market now stands behindbarricades, empty. Trade in counterfeit goods is much lessapparent than just a few weeks ago, and the number of tradersappears to be waning. The government still faces somehurdles to closing the Stadium completely, but things arefinally moving in the right direction.ASHE